Legal Informer: Exportation of Agro Products From Nigeria
The Nigerian Government has in recent times focused on agro-export promotion amongst others with the aim to boost and build a sustainable economy. The focus of the Nigerian ndustrial policies is geared towards earning more forex and growing private capital investments in the agro-export value chain.
On 19 January 2023, the Nigeria Export Promotion Council (NEPC) in partnership with the operator of the Nigeria Export Trade House in China, Zeenab foods launched the first exportation of 20 containers of ginger and sesame seeds to China valued above $1.3million, in preparation for the commissioning of the Nigeria Export Trade House in China by March 2023.
Just recently, Tingo Foods, a subsidiary of the Tingo International Holding Inc group announced the beginning of a US$1.6 billion agri-food processing unit construction in Delta State. The construction work on the new plant which started on 9 February 2023 is scheduled to take a period of 18 to 24 months. Once operational, the facility will produce a range of food products including rice, tea, coffee, chocolate, biscuits, edible oil, cashew milk, millet-based cereal, etc. The facility operations will strengthen the export of made-in-Africa foods and enhance inter-Africa trade via the Africa Continental Free Trade Agreement.
These capital investments and government alliance will spur the interest of tons of private
agricultural businesses owners into commercialization and exportation of agricultural products. Though commendable, it is imperative to understand legal issues in export contracting process. The primary law regulating the exportation of agriculture in Nigeria is the Nigerian Export Promotion Council Act (“the Act”). The Act establishes the Nigerian Export Promotion Council (“NEPC”), which is responsible for promoting and facilitating the exportation of Nigerian products, including agricultural products. To minimize export risks, ensure the exported goods conform to specifications and assist in qualifying for export incentives, NEPC has listed the essential documents required for formal exports of goods and services from Nigeria, one of the essential documents is the Export Contract.
An Export Contract is also known as an Export Sales Contract/Agreement. It is an agreement
between an exporter and the importer spelling out the rights and obligations of parties and the
terms of the export business. International trade is a trade-border transaction involving parties
from diverse countries with different laws and regulations. It is therefore essential that the terms and provisions of your contract are accurate, unambiguous, comprehensive, adhere to recognized international laws and protect your interest as a potential exporter. Several disputes have occurred in international trade due to unambiguity or omission of essential provisions like the product standard/specification, payment terms, transfer of risks, insurance, termination, choice of applicable law, and settlement of disputes.
Certain occurrence may lead to termination of the agreement, goods in transit are exposed to
several kinds of risk, delay, damage or even loss. In the best interest of parties, it is recommended that parties agree on the terms of termination, and the rights and obligations of the parties after termination in event such situation arises. Also, there is need to agree on insurance, determine at what point property and risk is transferred, and the most favourable International Commercial Terms (incoterms) to parties. While standard contract forms can be used in drafting an export contract, it is advisable to employ the services of an expert lawyer to ensure such contracts guarantee fairness and precisely cover present and foreseeable occurrences, in line with parties intention.
Overcoming these challenges makes the agriculture sector more attractive and increase the
livelihood of the farmers and the country.